Salazar and Colleagues Call on IMF to Create New Argentina Program

WASHINGTON, D.C. – Today, Western Hemisphere Subcommittee Chairwoman María Elvira Salazar (R-FL) was joined by Republican members of Congress to urge the International Monetary Fund (IMF) to open new negotiations with the Republic of Argentina to create a robust financial package in order to support Argentina on their economic path to recovery. Joining Congresswoman Salazar on the letter were Representatives Chris Smith (R-NJ), Carlos Giménez (R-FL), Bill Huizenga (R-MI), Mario Diaz-Balart (R-FL), Mike Lawler (R-NY), Mike Waltz (R-FL), Joe Wilson (R-SC), Tom Kean, Jr. (R-NJ), and Keith Self (R-TX).  

In their letter to Dr. Kristalina Georgieva, Managing Director of the IMF, the Representatives commended President Milei’s efforts to restore reliability as an economic borrower and end Argentina’s historical financial mismanagement under previous socialist administrations. The Members highlighted Milei’s background as an economist, his already-enacted measures to curtail inflation, and his Déficit Cero budget austerity plan as positive steps taken to accomplish those outcomes. 

“The United States is the largest shareholder of the International Monetary Fund and therefore takes a keen interest in its activities. In Argentina, President Milei has vowed to restore his country’s reputation as a country that pays its debts and belongs in the club of countries that are reliable borrowers,” wrote the legislators. “According to reports, the economic adjustment plans he has implemented through the executive branch and the legislature are already curtailing inflation, hopefully setting Argentina on a path that ensures it will not miss any international financial obligations. As such, we ask that you consider these positive measures as you assist Argentina in charting the course ahead.”

Below is the text of the letter. The full letter can be found HERE.

Dear Managing Director Georgieva,

As members of Congress of the United States who oversee foreign affairs issues, we write to you concerning the Republic of Argentina’s stated commitment to putting its fiscal house in order and righting the ship of state. The United States is the largest shareholder of the International Monetary Fund and therefore takes a keen interest in its activities. In Argentina, President Milei has vowed to restore his country’s reputation as a country that pays its debts and belongs in the club of countries that are reliable borrowers. According to reports, the economic adjustment plans he has implemented through the executive branch and the legislature are already curtailing inflation, hopefully setting Argentina on a path that ensures it will not miss any international financial obligations. As such, we ask that you consider these positive measures as you assist Argentina in charting the course ahead.

We are encouraged that President Milei appears to be working toward meeting Argentina’s international obligations.

As an economist, President Milei knows what the necessary measures are to tame inflation and ensure Argentina meets its commitments to the International Monetary Fund and other international creditors. In fact, should his Déficit Cero budget austerity plan be implemented in its entirety, the result would go beyond what the IMF has requested, cutting spending across the board and responsibly tackling Argentina’s economic challenges. 

We believe that the IMF was generous with past profligate socialist governments.

Since the Presidency of socialist Néstor Kirchner, the IMF has treated Argentina with incredible generosity, despite refusals of consecutive socialist governments to cut spending. The few times these governments did pay, it was because they printed more of the Argentine peso (ARS), a strategy which many economists believe caused a painful inflation crisis which wrecked Argentina’s economy. Nonetheless, these profligate governments received deals for $21.6 billion in 2001, $15.6 billion in 2003 and most recently $44 billion in 2022. Despite the IMF’s generosity, the Kirchner government was in default from 2007-2015. We are encouraged by President Milei’s stated commitment to leaving this shameful and damaging legacy where it belongs – in the past.

President Milei’s government appears to be reinstituting fiscal responsibility after decades of mismanagement, but needs support.

The current $800 million disbursement provided earlier this year is helpful. To repair the years of corruption and mismanagement, we believe that Argentina will need robust multilateral bank support, such as through a comprehensive IMF program, that would support Argentina’s difficult path toward economic health. Within all applicable rules and regulations, we respectfully request that you assess whether such support would both complement and reward the tough decisions that President Milei has made toward promoting Argentina’s long-term solvency and prosperity.

We appreciate President Milei’s efforts to pay down Argentina’s debt and bring prosperity to his country. We think that these efforts could be bolstered by time and help from multilateral financial institutions such as the IMF.

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